Inflation, price rise affect Bihar developmental projects: Modi

Published: Friday, July 25, 2008, 18:35 [IST]

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Patna, Jul 25 (UNI) High rate of inflation, coupled with spiralling rise in prices of all raw materials have severely affected the infrastructure development programmes in Bihar besides putting extra burden on the state exchequer.

This view was expressed today by Bihar Deputy Chief Minister -cum-Finance Minister Sushil Kumar Modi while providing a detailed account of the present inflationary scenario in the state.

Speaking to the media at his Assembly chamber here after the House was adjourned for the day, Mr Modi claimed that only in terms of road construction projects, the cost was hiked by more than Rs 712 crore this year.

''This was because nearly 79 per cent increase in the prices of bitumen, 41 per cent of steel, 20 per cent of cement and over 30 per cent of carriage charges had rised during the past 12 months only,'' Mr Modi informed.

Citing similar examples in the housing sector the Finance Minister said as a result of tremendous hike in prices of all building materials, the overall cost was increased by more than 38 per cent in just one year.

Referring to the possibility of further hike in prices of steel, Mr Modi said the three months moratorium, as announced by the steel manufacturers following their meeting with Prime Minister Manmohan Singh on May 7, would expire on August 6.

''As a result we apprehend steel prices to further go up by at least 15 to 20 per cent by next month,'' the Minister pointed out.

He said all these factors would have a compound affect on the state economy, particularly on the state exchequer, as more than Rs 6,750 crores would be required to finish the ongoing infrastructure development projects in Bihar on schedule.

He, however, claimed that unlike the previous RJD regime, the ruling NDA has set up a special committee to review the progress of work in every three months and recommend the hike in prices of each raw material for their immediate disbursment to the concerned agencies.

''This would ensure that no matter how big the burden was, all tragetted developmental projects in the state would be completed on time and as per schedule,'' Mr Modi assured.